FHA loans are about to get more expensive

Uh-oh.  Here's from lender Dana:

Hey Everyone … if you have clients looking to purchase with FHA loans, this might motivate them to buy before rates start going up.    The monthly premium amounts are going to be raised and also the up-front mortgage premium.   Sounds like it’s going to start happening in April and June:

FHA to Increase UFMIP to 1.75 for New FHA Loans

6:03PM

As part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund, Acting FHA Commissioner Carol Galante today announced a new premium structure for FHA-insured single family mortgage loans. FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount. Upfront premiums (UFMIP) will also increase by 0.75 percent.

These premium changes will impact new loans insured by FHA beginning in April and June of 2012. Details will soon be published in a Mortgagee Letter to FHA-approved lenders.

“After careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” said Galante. “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

I'm excited about my new Pasadena listing at 1585 Knollwood Terrace!

On March 1, my new Pasadena listing will launch in the multiple listing service and be available for showing.  Isn't it pretty? You can see more pics on my website at JudyGraff.com and even more pics can be found on all the public sites once it lists.

The home is located in the Linda Vista area of Pasadena, on the hill to the west of the Rose Bowl.  The area features much old-growth greenery, stately homes, tranquility, wildlife (see pictures of deer on the mls listing) and yet quick access to freeways, downtown LA and Pasadena, and La Canada.  I would rather live in the Linda Vista area than at the beach.  Really.

The house itself is a mid-century ranch (built in 1955) with pool (as you can see).  It's 2235 square feet and is located on a 24,000 sf lot (most of which is hillside).  It is up a long driveway which makes it extra private.  Huge windows fill the home with light and also enable you to enjoy a view from just about every room.  The house has four bedrooms, one of which is being used as an office and has its own fireplace (there's another fireplace in the living room).  All three baths have been remodeled. The pool and spa are solar-heated.  The kitchen has lots of upgrades and cabinets, the hardwood floors gleam and...I guess I'm gushing, but it's a fabulous property in a fabulous location.  List price is $1,049,000 and the first open house will be from 1:00 pm to 4:00 pm on Sunday.  Come see!

2007 N. 6th Street, Burbank, has closed. Hooray!

The probate fixer at 2007 N. 6th in Burbank has closed for $450k.  This property is rough and I wish the new buyers all the best for this.  Yes, they plan to re-do it and sell it. 

We received a total of 11 offers and all of them were cash.  And, surprise surprise, we got into a late bidding war (usually bidding wars happen at the beginning of the listing).  Three buyers duked it out (and wanted to duke me out) over about $1000 dollars at a time. 

The house had been vacant for many years and had holes in the ceiling, holes in the floor, etc.  Yes, it was jungle-y around the outside which is why the picture above isn't better. We worked around break-ins, trash-outs, board-ups, etc.  The probate attorney was a real asset (don't be afraid of probate, buyers!) and some of the sellers were, too.  I'm sure the new house will be a welcome addition to the neighborhood.

Unvarnished truth in real estate advertising? We gots it.

Need a 3000+ sf short sale home in Sherman Oaks for $602,000? Check out the listing agent's text for this new listing on Meadville (unedited): The house has major foundation issues with mold. No warranties are giving. Buyer to hire a general contractor and mold company. There are cracks in the foundation with 3 to 4 inches off the back of the house. No termite report or termite completion. The retaining wall has major issues with water running into the back of the house. Part of the house in not in liable condition. Buyer to be aware of dog in backyard.Please be aware there is freeway noise. The seller holds a valid CA Real Estate. Their was additional structural damaged found after buyer inspection. The pool does not work or in operating condition. A lot of draining issues with leaking roof. If you are LOOKING FOR A HOUSE WITH MAJOR DAMAGE YOU FOUND IT. The retaining wall is worse condition then expected.
Such candor is kind of refreshing, no? Yes, that's the best picture, above. How long do you think it will take it to go pending?

My property showings on L.A.’s “Eastside”

Thanks to a couple of my buyers, I've been spending a lot of time in what's being called the Eastside lately. (Check out the Echo Park post below.) This past Sunday, I showed property in Atwater Village, Eagle Rock, Mt. Washington, Highland Park and Glassell Park. I had never shown property in the last two communities but I had a great time and really learned a lot about the areas. I was very delighted by what I saw and intend to get to know these localities more in the coming months.


Yes, some of the neighborhoods are “transitional” but they offer good housing stock at affordable (at least for now) prices. The gangs that were so prevalent in years past seem to have moved out. The flippers have gone through these neighborhoods and have worked their magic, too. And neighborhood amenities are increasing, too – cool coffee houses, restaurants, small retail, farmers’ markets, etc. (We could barely move through Atwater Village as the streets and sidewalks were so crowded.) Cons: the schools aren’t all that, and buyers would have a helluva commute if they work on the Westside.

Here are the highlights:

Decorating trends (above) The flippers are hiring stagers. Now, I love staging but I’ve seen a lot of it in recent weeks and it’s beginning to look the same. It’s all modern or semi-modern furniture with pops of color, folk accent pieces, and no window treatments. Not a bad thing, but..

Another trend: forget yards; it’s all rock and bark now.

Most disturbing/interesting trend: crazy chicken pictures as art.  I saw these in at least two houses.  Sigh.  Just another next big thing that I'm not cool enough to know about.

Coolest location: 1316 Highgate Ave., Highland Park, listed at $499k (above). This 3+2 flipped craftsman is in a charming, wooded hillside neighborhood.  You'd never guess that you could almost walk to downtown L.A. from here.


Nicest view: 3600 Maceo Street, Mount Washington, listed at $440,000 (above). This 2+3 is actually in Cypress Park and close to Glassell Park. At the top of its big terraced backyard, it overlooks the entire L.A. river area from downtown to Elysian Park to Glendale. And you have your own bare hillside right next door.

As you can tell, I get really excited about discovering new neighborhoods. IMO, these areas present excellent options for buyers looking for affordable price and revitalized neighborhoods.

Burbank parrots were in my neighborhood this a.m.!

The huge flock of Burbank parrots were in my "above Glenoaks" neighborhood this a.m.  I had previously posted on the flock's whereabouts in Magnolia Park.  These birds are smart -- it's always good to look at several neighborhoods in a city before settling on just one.

Gretchen Morgenson and Michael Hiltzik explain the foreclosure settlement

I was so excited.  I thought the almost-nationwide foreclosure settlement between the five big banks and the states would provide relief for underwater homeowners.  I thought it might be an end to short sales as we've come to know and love them.  But no. 

New York Times business columnist Gretchen Morgenson bursts the bubble here. (BTW, Gretchen is really readable -- she makes even the most arcane, convoluted financial stuff very easy to understand. Really.)  Here are a few quotes:

"There’s no doubt that the banks are happy with this deal. You would be, too, if your bill for lying to courts and end-running the law came to less than $2,000 per loan file."

And "For most homeowners, it will barely move the needle. Forgiving $17 billion in principal “is a drop in the ocean ... given that close to 11 million borrowers are underwater on their loans to the tune of $700 billion in total.”

Michael Hitlzik from the Los Angeles Times is my other favorite financial columnist (along with David Lazarus) and his column from today's LAT is here. Some quotes:

"I believe the technical term for all this is "big whoop." The provisions mostly require mortgage lenders and servicers to comply with what I would have thought was already the law, which prohibits, you know, criminal fraud. The rest is pretty much out of the best-practices manual of customer service, which benefits both the customer and the institution."

And "In the words of business consultant...Yves Smith, "We've now set a price for forgeries and fabricating documents. It's $2,000 per loan." She observes, quite properly, that the payoff is a minuscule fraction of the costs these practices have imposed on borrowers, the court system and the economy."

Whew. So much for thinking that things were going to change -- silly me.  Thanks, Gretchen and Michael.

What does the government/big bank foreclosure settlement mean to you? Well, perhaps a write-down in principal

We've all seen the headlines about the government settlement with the big banks, but what does it really mean? Check out this article from the Washington Post:
http://www.washingtonpost.com/blogs/where-we-live/post/what-does-the-foreclosure-settlement-mean-for-you/2012/02/09/gIQAxE9U1Q_blog.html
This is so new that these are the only details that I have, but it looks like -- don't get excited yet -- these five banks have agreed to PRINCIPAL reduction if you're underwater!!! I'm sure the devil is in the details, but...

In the meantime, here in our land, expect inventory to get even shorter as a lot of short sales may be cancelled because of this.

Save the Rancho in Burbank

The Burbank Rancho neighborhood is one of the city's most unique features, especially if you're a horse or horse owner.  The homes are zoned (most of them) to allow the stabling and boarding of horses in the back yard.  There are Griffith Park riding trails close by, and the neighborhood blends into the Glendale Rancho area.  It is also home to the L.A. Equestrian Center.  The residents are understandably very protective of the Rancho and have faced -- and beaten -- challenges to development over the years.

Now, the GM training facility in the neighborhood has been sold, and the new developer wants to put up a 50-unit detached condo complex.  Most of the Rancho neighbors object as it affects the neighborhood's character and is just too damned big.  Last night's Burbank City Council held public comments on the issue and predictably, it was running about 20-0 against the project (some of the comments were, uh, very um, racist inappropriate).  The objecting area residents seem to favor an equine hospital instead.  If you'd like to learn more about this issue, please visit SavetheRancho.com.  Where do I stand? I understand why developers like big projects -- it's more money for them.  But why do cities like big projects? Why must all development be big, with all of bigness's attendant problems? If not the horse vet center, why not, say, 10 homes zoned for horses, such as the Dincara Street development?

My video is up on Yelp

My video is up on Yelp.  Just type in "real estate agents" near either Sherman Oaks, Burbank, Valley Village, Studio City, etc. and my name will come up.  Click on the link and you can view the video.  I'm trying to get a copy for this blog.

Wild parrots in Burbank

As if Burbank wasn't already distinguished enough: I just learned that the town is also the residence of a big flock of wild parrots.  I saw them myself yesterday.  I'm told that these pretty birds squawk their way across Magnolia Park early in the am and about 5-ish in the evening.  Going where? Who knows.  Being chased by a huge wild airborne kitty, perhaps? Dunno. Going to work/coming home from the studios? Unlikely -- they wouldn't get off until 6.  Roosting after feasting on crumbs at Porto's? Maybe.  If you know anything about these parrots, I'd love to know who/what/when/where/why.

Beware of the evil clowns of Los Angeles short sales

Of course I couldn't go a month without saying something about short sales, right? Lately, I've been made aware of new and different scams perpetrated on short sale sellers in Los Angeles and the San Fernando Valley.  If you or anybody you know is thinking about selling short, there are a few things you should know to protect yourself. 

First and foremost, you shouldn't pay any money to anybody upfront to handle a short sale for you.  They get paid through the commission when the sale closes.  This is California law.

Second, you need to sign all legally binding contracts, starting with the listing paperwork.  No matter how dire your straits are, please take the time to review the paperwork your Realtor gives you.

Third, you'll need to disclose everything you know about your property in standard forms.  Your Realtor can help you fill these out, but don't let him/her do it for you.  You're liable for non-disclosure long after escrow closes.

Fourth, yes, you do have a say in who buys your place, and the terms and conditions of the sale.  You'll sign off on this paperwork, too.  You're probably thinking, "But I'm walking away with nothing in a short sale; why should I care?" Well, there are many contractual terms that still concern you besides money, such as when possession will be given to the new buyer (negotiable), what appliances stay, whether leases are still in force, etc.  One thing to know: you can't short sale your property to a relative.  The bank will insist that the transaction be "arms length."

Five, and this is important, you can take your property off the market (just in case, say, you get a windfall and no longer have to short sale it).

Remember, sellers, your short sale negotiator/Realtor is working for you, first and foremost.  Don't be afraid to ask questions.  If you'd like to educate yourself more about the process, the California Department of Real Estate has lots of info on its website, as does the California Association of Realtors.